Don't Mess With Taxes

Helio Castroneves has found maneuvering the federal court system a bit more challenging than the race tracks with which he's more familiar. The two-time Indianapolis 500 winner has been charged with plotting, along with his sister and an attorney, to evade taxes on approximately $5.5 million in income. Last week, he headed to federal court in Miami to seek dismissal of the charges. U.S. District Judge Donald Graham, however, black flagged the request. Another hearing on more pretrial motions is scheduled for Monday. The trial itself is set to start on March 2. Federal prosecutors allege that the Brazilian racer... Read more →

Could it be true? Could Citigroup executives really decide to pull out of the company's 20-year, $400 million agreement with the Mets, which includes naming rights to the club's new baseball stadium? Maybe public shaming does work after all. Reports of financial groups spending extravagantly after receiving Troubled Asset Relief Program (TARP) funds, aka bailout money, have not set well with the public. Last fall, Citigroup received $45 billion in bailout funds. Subsequently, Uncle Sam agreed to cover most losses on $301 billion worth of the financial group's bad assets. And Citigroup's CEO, along with other banking industry officials, are... Read more →

Singer-songwriter Bill Zucker has put into verse and set to music what every American has been saying for months: I want some TARP! Yes, it does indeed seem, as Bill sings, that the $700 billion Troubled Assets Relief Program is "giving away money for free." The song debuted, as you can see from the video, on CNBC's Power Lunch program. Zucker told the Boston Herald that the idea came to him as he watched the cable business news channel and saw "my life savings dwindle in front of my eyes. I was pretty heavily invested in the real estate and... Read more →

You knew this had to happen. Purveyors of adult entertainment say it's time that they got the same government help as financial firms and the auto industry. Yep, Hustler's Larry Flynt and Girls Gone Wild's Joe Francis say it's time for a bailout of the porn industry. Flynt and Francis say the economy has hurt their businesses, too, with sales of XXX DVDs down 22 percent. They want $5 billion in federal funds to help them make it until things pick up. TMZ has Francis' rationale behind the request. "The government has changed its economic policy and now is just... Read more →

If you really believe gasoline will continue to cost around $1.50 a gallon, give me a call. I have a personal bailout package you might be interested in funding. Sooner rather than later, OPEC is going to say "enough" and do what it takes to push pump prices up again. They may not reach $4 a gallon again, but they likely will be at least double what we're paying now. And there is some sentiment to add to our fuel costs via increased gasoline excise taxes. So if you've got some cash to spare, it might be a good time... Read more →

So many good headlines on today's New York Times' editorial pages. "Heaven for the Godless?" "Curbing Credit Card Predators." "Why We're Still Happy." And my favorite: "Stop Being Stupid." But since the ol' blog's bread and butter is taxes, I'm directing your attention to "The Gas Tax." The paper's editorial writer argues that the only way to make the auto bailout work is to ensure that motorists purchase the fuel-efficient vehicles the car makers must build in order to keep the federal money. The worry is that as long as gasoline stays below $2 a gallon, we'll all go back... Read more →

Washington, D.C., is at it again. First it was the U.S. Treasury with its changes in regulations to allow banks to benefit from net operating losses. Now Congress is getting in on the bailout special tax break act. According to the New York Times, "A little-noticed provision in the proposed bailout plan for Detroit's automakers blesses an aggressive tax shelter sold by large banks and insurers to municipal transit agencies across the country." The provision asks the government to help the agencies by guaranteeing the economics of the complex shelter known as Silo for sale-in, lease-out. Unlike the tax code... Read more →

This afternoon, Senate Majority Leader Harry Reid (D-Nev.) said that legislative body will probably act first on a $15 billion auto industry bailout package. His Republican counterpart, however, immediately raised concerns about the in-the-works proposal. According CQ Politics, Senate Minority Leader Mitch McConnell (R-Ky.) criticized key parts of a draft bill that was circulated Monday, underlining the trouble supporters may have overcoming opposition in the upper chamber from GOP members. The latest word is that Congress may be in for a weekend session to hammer out a final loan package to help the Big Three U.S. car makers survive. NASCAR... Read more →

A letter is circulating as part of an effort to get Congress to halt and reverse the now infamous bank loss rule. As you probably recall since I've blogged about it quite a bit, the tax code was changed as part of emergency stimulus, aka bailout, efforts. Now some banks that buy floundering financial institutions can simply ignore the tax law that prevents them from using the losses of the acquired banks to help reduce their, the buying banks', tax bills. Several members of the House and Senate tax-writing committees have introduced legislation to stop this special tax break (blogged... Read more →

The eyes of not just Texas, but all of the United States, lately have been on domestic auto manufacturers. Will the Big Three American car companies get a bailout? How much? Will their executives really take a pay cut? What about union-negotiated employee contracts? If a bailout happens, when will that be? Those questions might be answered in the next week or so, or any resolution might have to wait until next year. President-elect Barack Obama today reiterated his support for auto industry assistance, within limits. "I think Congress is doing exactly the right thing by asking for a conditions-based... Read more →

A couple of weeks ago, Texas Congressman Lloyd Doggett introduced legislation to roll back some of the tax breaks given banks in connection with financial bailout activities. However, given that there realistically is no way the measure will make it into law with so few days remaining in the 110th Congress, Doggett and several of his colleagues have decided to appeal directly to Treasury Secretary Henry Paulson. Bill would limit tax advantage of losses: Specifically, the Lone Star lawmaker is concerned about IRS Notice 2008-83, which was ordered by Paulson and which changed application of Internal Revenue Code Section 382... Read more →

I've been getting my December bills in order and this month is full of big ones. There is, of course, the mortgage, which usually leads the payment amount parade. Our car insurance is close behind the house payment this month. Yeah, I know, bad timing to have that bill come due at holiday time. But the major drain on our bank accounts every December is our annual property tax bill. In 2005, our first property tax bill for our suburban Austin home bill was horrifically high, especially compared to what we had paid in Florida. The hubby and I had... Read more →

We all know about the financial troubles facing the big three American car makers. Today we get news that many of Chrysler's salaried workers accepted pre-Thanksgiving buyouts. That move could had a bearing on whether, or just how much, the rest of us taxpayers will eventually pick up if we ultimately add payments to General Motors, Ford and Chrysler to our ever-growing bailout bill. And while all that corporate tax money drama plays out, we learn that Detroit is ground zero for other tax-related troubles. The Detroit News' Tax Watchdog blog says a couple of the city's former professional athletes... Read more →

Even in the toughest of times, some corporate ideals remain firmly entrenched. Like, for example, spending company money to put the firm's name on a sports stadium. Not only is there the built-in advertising, both print and every time an announcer mentions the place, but company bigwigs get a choice suite in which to entertain clients and ignore the feats on the field. (That Miller High Life commercial in "Section La-di-dah" got it so right.) But sometimes things go horribly wrong, for the companies and teams, corporate employees and fans. Remember the Astros used to play in Enron Field. Neither... Read more →

The federal bailout of financial institutions, or Troubled Asset Relief Program (TARP) as it's officially known, reminds me of refrigerator stew. You know the recipe. You take every still-edible leftover, toss them in the biggest pot you've got, add water and then throw in some seasonings. Adjust the heat as necessary and cook until it tastes good or you're just too hungry to wait any longer to eat. When it comes to the bailout stew, Chief U.S. cook Hank Paulson, whose other job is Secretary of the Treasury, keeps adding new ingredients every day. And he turns the stove top... Read more →

The man who helped popularize the "starve the beast" philosophy toward government has decided to try to work from within, at least temporarily. Essentially, adherents to this fiscal-political strategy say that by reducing the amount of money coming into the government, that is, by dramatically cutting taxes to effectively create budget deficits, the "beast" of federal government will be forced to shrink via program cuts. Of course, that leads to the battle over just which programs and services to put on this tax starvation diet. Most who support this approach tend to target federal social programs, such as Social Security,... Read more →

Insurance giant AIG, fresh off getting another round of federal taxpayer money, says it plans to pay out $503 million in deferred compensation to some of its top employees. The company says it needs to use the bailout funds to keep valuable workers from exiting the troubled insurance giant, according to the Washington Post. Uh, are they really that valuable if the company found itself needing gazillions of dollars from Uncle Sam? And just who would want to "steal" the folks who help put a company in such straits? Meanwhile, reports the paper, members of Congress are questioning the company's... Read more →

Life can be funny. And sad. And infuriating. And just downright wrong. All of those apply to the financial situation of American International Group Inc., better known by its initials AIG. We're all too familiar with the recent $150 billion federal bailout of the insurance giant. After the money was forked over, the fun revelations started coming. We soon learned, but not soon enough, that the deal was structured to protect AIG's loan interest tax deduction. Well played, AIG tax attorneys. You obviously are much better than our government lawyers. Then came word of the AIG retreat. Apparently AIG execs... Read more →

Yesterday, before I headed out to spend most of the day at meetings, I turned on the television to see how much money my investments were losing. Yeah, I always like to start my days on a happy note! If you've paid attention to market movement, you know I cringed when the cable station cut away for a press conference by U.S. Treasury Secretary Henry Paulson. Lately, every time Dubya or anyone from his Administration takes to the airwaves to make an official statement on the financial crisis, stocks tank. They did again yesterday. OK, maybe it's coincidental, but I... Read more →

We Main Streeters must wait until next year for any potential relief from another stimulus package. Even then, as I blogged here, it's not going to be a stimulus rebate check along the lines of those issued in the first round of economy boosting efforts. But some big banks already are getting their tax bonuses, thanks to a Treasury rule Don't Mess With Taxes blogged about on Sept. 9 in the wake of the Fannie Mac/Freddie Mac rescue. Back then, we noted that Section 382 of the Internal Revenue Code says that net operating losses (NOLs) are limited when there... Read more →